I just conducted a test with those settings (all others being default) and it seemed to work fine with 5 players. When it got down to 2, it ended immediately and split the prizepool and issued the tickets:

I received your files and I see the problem. You have a freeroll with no buy-in. So there's no prizepool to chop and thus the setting is ignored. Otherwise the tournament would stop immediately without playing a single hand. The chop setting does not take ticket payouts in consideration on when to stop, it's only based on the prizepool.